Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

Trend analysis is a form of horizontal analysis

25/11/2021 Client: muhammad11 Deadline: 2 Day

WAL-MART ANALYSIS

NOTES FOR HORIZONTAL AND VERTICAL ANALYSIS

Horizontal analysis (also known as trend analysis) is a financial statement analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time. It is a useful tool to evaluate the trend situations.

The statements for two or more periods are used in horizontal analysis. The earliest period is usually used as the base period and the items on the statements for all later periods are compared with items on the statements of the base period. The changes are generally shown both in dollars and percentage.

Dollar and percentage changes are computed by using the following formulas:

Horizontal analysis may be conducted for balance sheet, income statement, schedules of current and fixed assets and statement of retained earnings.

Example:

An example of the horizontal analysis of balance sheet, schedule of current assets , income statement and statement of retained earnings is given below:

Comparative balance sheet with horizontal analysis:

Comparative schedule of current assets:

Comparative income statement with horizontal analysis:

Comparative retained earnings statement with horizontal analysis:

In above analysis, 2007 is the base year and 2008 is the comparison year. All items on the balance sheet and income statement for the year 2008 have been compared with the items of balance sheet and income statement for the year 2007.

The actual changes in items are compared with the expected changes. For example, if management expects a 30% increase in sales revenue but actual increase is only 10%, it needs to be investigated.

Vertical analysis (also known as common-size analysis) is a popular method of financial statement analysis that shows each item on a statement as a percentage of a base figure within the statement.

To conduct a vertical analysis of balance sheet, the total of assets and the total of liabilities and stockholders’ equity are generally used as base figures. All individual assets (or groups of assets if condensed form balance sheet is used) are shown as a percentage of total assets. The current liabilities, long term debts and equities are shown as a percentage of the total liabilities and stockholders’ equity.

To conduct a vertical analysis of income statement , sales figure is generally used as the base and all other components of income statement like cost of sales, gross profit, operating expenses, income tax, and net income etc. are shown as a percentage of sales.

In a vertical analysis the percentage is computed by using the following formula:

A basic vertical analysis needs an individual statement for a reporting period but comparative statements may be prepared to increase the usefulness of the analysis.

Example:

An example of the vertical analysis of balance sheet and income statement is given below:

Comparative balance sheet with vertical analysis:

Current assets:

2008: (550,000 / 1,139,500) × 100 = 48.3%
2007: (530,000 / 1,230,500) × 100 = 43.3%

Comparative income statement with vertical analysis:

Cost of goods sold:

2008: (1,043,000/1,498,000) × 100 = 69.6%
2007: (820,000/1200,000) × 100 = 68.3%

Vertical analysis states financial statements in a comparable common-size format (percentage form). One of the advantages of common-size analysis is that it can be used for inter-company comparison of enterprises with different sizes because all items are expressed as a percentage of some common number. For example, suppose company A and company B belong to same industry. A is a small company and B is a large company. Company A’s sales and gross profit are $100,000 and $30,000 respectively whereas company B’s sales and gross profit are $1,000,000 and $300,000 respectively. If vertical analysis is conducted and sales figure is used as base, it would show a gross profit percentage of 30% for both the companies as shown below:

Company A and B

Comparative Income Statement

For the year ended…….

Company A

Company B

Sales

100,000

100%

1,000,000

100%

Cost of goods sold

70,000

70%

700,000

70%

———

———–

30,000

30%

300,000

30%

———

———–

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Homework Guru
Math Exam Success
Peter O.
Top Class Engineers
Academic Master
Unique Academic Solutions
Writer Writer Name Offer Chat
Homework Guru

ONLINE

Homework Guru

I am a PhD writer with 10 years of experience. I will be delivering high-quality, plagiarism-free work to you in the minimum amount of time. Waiting for your message.

$38 Chat With Writer
Math Exam Success

ONLINE

Math Exam Success

I find your project quite stimulating and related to my profession. I can surely contribute you with your project.

$20 Chat With Writer
Peter O.

ONLINE

Peter O.

I find your project quite stimulating and related to my profession. I can surely contribute you with your project.

$38 Chat With Writer
Top Class Engineers

ONLINE

Top Class Engineers

As an experienced writer, I have extensive experience in business writing, report writing, business profile writing, writing business reports and business plans for my clients.

$27 Chat With Writer
Academic Master

ONLINE

Academic Master

I will provide you with the well organized and well research papers from different primary and secondary sources will write the content that will support your points.

$50 Chat With Writer
Unique Academic Solutions

ONLINE

Unique Academic Solutions

I find your project quite stimulating and related to my profession. I can surely contribute you with your project.

$20 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Ape genius video questions answers - Educare past exam papers - Router and routing basics pdf - Flag note bank solidworks - Accounting transactions exercises with answers - Inverse laplace transform matlab - Leading edge computers werribee - Tumby bay medical centre - 524 wilson street darlington - Assignment 2 - Watchdog water alarm manual - Data Analysis and Visualisation - What is composition in a sculpture - Algebra rules cheat sheet - Critical Assignment - Empire aggressor 390 crossbow review - Bridge rectifiers in parallel - Penn foster biology research paper example - Hamzah marbella paintings for sale - Wv dep oil and gas well information - Ahima data quality management model - Ambassador john w mcdonald - Organic grains llc uses statistical process control to ensure - Educational Philosophy - Aubin grove train station - Gravimetric determination of chloride calculations - Conjugate acid base theory - Suppose we are analyzing the market for hot chocolate - Nursing Theory Application Brochure - Meeting point poem analysis - A capacitor has a label on it saying 100 wvdc - Central idea of a speech - Berchtold s35 service manual - HELP - Breaking down a topic brainstorming - Monash business school student services - Royal gwent hospital phone number - Question Due tomorrow - Distance in kilometers from city to city - The practice of statistics 3rd edition teacher's edition - Matlab about the electrical circuit - Leece neville alternator troubleshooting - Forced convective heat transfer between two parallel plates - ASTLB HW - Gibbs model of reflection example - Don sabo pigskin patriarchy and pain - Can informatics be used to gain wisdom - Saral transfer paper hobby lobby - Need a music expert! - Silver sponge garden city - Scholarly Activities (TOPIC FALL PREVENTION STRATERGIES IN HOSPITALS) - 2/20 mawarra street palm beach - Training PowerPoint Presentation - F class gas turbine definition - Ps music balance sheet - Jcb brush cutter manual - Need to do 3 lap report can somebody help me out please - Brave new world state motto - Introduction to assembly language ppt - Describe the tone of gandhi's chapter on his child marriage - Wk7 DQ1 Discussion Question 1 – CLO 1, CLO 2, CLO 3, CLO 4, CLO 5, CLO 6, CLO 7, CLO 8 - Swansea uni bay campus address - Av jennings house plans victoria - Questions - Carnegie mellon university materials science - Components of the universe - Benchmark policy brief by 09/26/2020 please add references and citations,750 words - After hours doctor moonah - How many pounds of raw material are needed to make one unit of alpha and one unit of beta? - St stithians past papers grade 11 - Cross product of complex vectors - Aem boost gauge 30 4406 install - 42 industrial drive sunshine west - Math sprints grade 5 module 4 - Shareholder Analysis - The state patrol ticket processing system case study - Shrek the musical ending - Supply chain network design decisions - Evaluating Arguments - Society and culture core concepts - First 100 words dolch list - Difference between waveform chart and graph in labview - Wickes half frame bath screen - Load balancing in cloud computing ppt - Powerpoint - Toyota starlet dashboard lights - Assisments - Matt teachout - Woolworth pet insurance login - 1950 bette davis film crossword - What does faber mean when he says books have pores - Bill nye waves worksheet answers - Direct filling gold in dentistry - English - Symbolism in edward scissorhands - Classes of emulsifying agents - Punchbowl bus company 944 - You were hired as a consultant to quigley company - Delete discussion post on blackboard - Module 3 Journal Article Analysis